Role of Non Executive Director
|
|
Posted On :
Feb-23-2010
| seen (664) times |
Article Word Count :
581
|
|
Non exec Directors should also provide independent views on: organisations' resources, appointments, Standards of conduct.
|
|
A non-executive director or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she may be regarded as employed by the business or self-employed under a contract for services, depending on the terms and conditions of engagement or affiliated with it in any other way. They are differentiated from inside directors, who are members of the board who also serve or previously served as executive managers of the company (most often as corporate officers).
According to the Higgs Report, commissioned by the British Government and published in 2003, Non-executive directors have responsibilities in the following areas:
Strategy: Non-executive directors have the responsibility to contribute to the development of strategy.
Performance: Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitoring, and where necessary removing, senior management and in succession planning.
Risk: Non-executive directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible.They should be compitent enought to monitor the integrity of the financial statements of an organisation, and be able to review significant financial reporting judgments. They should also review the company's internal financial control system and check the effectiveness of the whole system.
People: Non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning.
Non exec Directors should also provide independent views on: organisations' resources, appointments, Standards of conduct.
Non-executive directors are the custodians of the governance process. They are not involved in the day-to-day running of business but monitor the executive activity and contribute to the development of strategy.
In light of the recent debate about good Corporate Governance practices, enlightened companies are asking: what should they do to ensure right balance in the boardroom? How should Boards be structured and what mix of skills and expertise will be right in the current environment?
Given all the skills and the seniority required from the position of Non exec Director in an organisation, finding and chossing the right non-executive director, can be challenging task. The few foremost conditions that should be looked into can be: a right candidate should either have a strong and influential track record in your industry, or he should have skills which presents an ideal opportunity for positive energy and knowledge transfer into your organisation. The most interesting point or situation requires the Non Executive Director to gel well with your organisation’s board and culture and on the same time they are required to be ina position where they can challenge the board and management on various issues.
Also the role of Non Executive Director requires the person to be flexible in context of availability. Sometimes they can be required to work part-time , and sometimes lots of time is required depending on the criticality of the issues and challenges facing the organisation.
Knowing what skills lie in their talent pool and constantantly monitoring the recent trends, First flight Placements can provide a shortlist of appropriate applicants within 3 weeks. A right agency will always look to strengthen the Board as well as the balance sheet. This provides the client company with direct investment, but also helps facilitate other sources of funding through demonstrable director commitment.
|
|
|
|
Article Source :
http://www.articleseen.com/Article_Role of Non Executive Director_11665.aspx
|
|
Author Resource :
editor, writer. Interests include writing placements of Non Executive Director, non exec directors, management buy outs, etc.
|
|
Keywords :
Non Executive Director, Non Exec Directors,
Category :
Business
:
Careers
|
|
|
|
